Disintermediation is the process of withdrawing funds from depository institutions and reinvesting them in different kinds of intermediaries.
Customers make deposits with depository intermediaries, who then use the funds for business operations. Even while these organizations may have other sources of income, managing deposits, earning interest from them, and making loans based on those deposits are what they do best.
In the United States, there are three main categories of depository institutions. These include credit unions, commercial banks, and thrifts (which also include savings and loan associations and savings banks).
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